GOP Govs Cool Toward Offer Of Flexibility On ACA

Gov. Nikki Haley at a meeting of governors hosted by President Barack Obama in the State Dining Room of the White House, Monday. (AP Photo/Charles Dharapak)

From The Wall Street Journal:

By JANET ADAMY

WASHINGTON—President Barack Obama on Monday backed a bill in Congress to let states design their own ways to expand insurance coverage sooner under the health-care overhaul, in a nod to governors’ complaints that federal rules are too rigid.

The proposal won cool reviews from Republican governors and doesn’t represent a fundamental change to the overhaul, but it could open the door to more rethinking of health-care policies as states are struggling with large deficits.

Speaking to governors at the White House, Mr. Obama also responded to a wave of pressure from governors who say Medicaid, the federal-state insurance program for the poor, costs the states too much. The president, without giving specifics, said his administration would work to lower states’ Medicaid costs and called for a bipartisan group of governors to craft ideas.

His proposal on increasing state flexibility involves a piece of the health law scheduled to take effect in 2017. It allows states to avoid the major mandates of the law, including the requirement that most people carry insurance or pay a fee, among other rules. To qualify, states must develop an alternate system of comparable coverage that insures as many people as the federal law, without increasing the nation’s deficit.

A bipartisan trio of senators has proposed legislation to allow the exemption in 2014, when most of the rest of the law kicks in. In his speech to the governors, Mr. Obama said he supported moving the date up.

Few states are expected to seek the health-law waivers, and the move did little to appease elected Republicans, who are overwhelmingly opposed to the law. “That doesn’t help us any,” said South Carolina Gov. Nikki Haley, a Republican. “They’d do us a favor if they let us opt out” of the entire law.

Mr. Obama’s offer comes as Democrats spar with Republicans in Washington and states across the country over the size and scope of government. Congressional Republicans want to slash $61 billion from the federal budget by the end of September. Mr. Obama has threatened to veto those cuts, but has frozen pay for federal employees and offered Congress billions of dollars in cuts in his budget.

Mr. Obama said sacrifices were necessary to tackle the deficit, but he defended his plans to spend more in some areas such as infrastructure and education.

“This hasn’t traditionally been a partisan issue,” he said. “We don’t have third-rate airports and third-rate bridges and third-rate highways. That’s not who we are.”

Mr. Obama would need some help from congressional Republicans to move up the date for the health-law waivers. That cooperation appears unlikely after they criticized his offer on Monday.

“That waiver doesn’t really address the structural flaw we all are facing now,” said Texas Gov. Rick Perry, chairman of the Republican Governors Association.

Vermont Gov. Peter Shumlin, a Democrat, said the change would make it easier for his state to develop a “single-payer” plan, under which the state would be the central funder of health care.

Sen. Ron Wyden (D., Ore.) co-sponsored the new legislation with Sen. Scott Brown (R., Mass.) and Sen. Mary Landrieu (D., La.). Mr. Wyden said, “My state is very interested in this.” He said he wanted a system that did more to expand insurance choices and reduce costs, though he didn’t offer specifics on how that would differ from the federal law.

“It sort of puts the onus back on those states who are critical of health reform and says, ‘OK, if you want to do this differently, show us how you do it,’ ” said Drew Altman, president of the nonpartisan Kaiser Family Foundation.

“This offers a little bit of flexibility, which I think is a positive thing,” said Kansas Gov. Sam Brownback, a Republican. “But it doesn’t change the overall objection to the bill.”

—Sara Murray and Patrick O’Connor contributed to this article.